SpiceJet may receive first tranche of Rs 400 cr soon

CCI clears ownership change to Ajay Singh

SpiceJet is expected to receive its first tranche of Rs 400 crore funding from new investors led by Ajay Singh on Monday (February 23), company officials told Business Standard. The development comes with the Competition Commission of India (CCI) clearing the change of ownership proposal from Kalanithi Maran to Singh on Thursday.

Singh will now seek a waiver from an open offer under Section 10 of the takeover code from the capital markets regulator, Securities and Exchange Board of India (Sebi). For this, the aviation ministry is expected to write to Sebi.

The new funding will help the low-cost airline clear a large chunk of its Rs 1,400 crore worth of dues, which include Rs 330 crore to state-run Airports Authority of India and about Rs 350 crore to aircraft lessors. Three of the lessors have taken the company to court over delayed payments. In all, SpiceJet is expected to receive Rs 1,500 crore from Singh by April, in line with a revival plan approved by the civil aviation ministry on January 22.

"The investment of Rs 400 crore is expected by Monday," a source close to the development said. CCI, in its meeting on Thursday, cleared the proposal, Smita Jhingran, commission secretary, wrote to Singh.

Till Wednesday, aviation ministry officials had confirmed SpiceJet was yet to receive any new funding and the airline was functioning from funds generated through the sale of forward tickets. Under the revival plan, SpiceJet was earlier scheduled to receive Rs 100 crore of funding in January and Rs 400 crore in February, with the balance Rs 1,000 crore coming in two equal tranches in March and April.

At a meeting on January 29, the SpiceJet board had cleared the transfer of Maran's and associate company KAL Airways' entire stake of 58 per cent to Singh. Maran will put in another Rs 375 crore through convertible warrants. SpiceJet, which is currently operating a fleet of 17 Boeing B737s (and 15 smaller Bombardier Q400 aircraft), aims to take its B737 fleet to 27 by April.

The SpiceJet scrip at the BSE closed 0.25 per cent up to Rs 19.95 on Thursday.